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Finance Bill 2018 has been presented by the honble Finance Minister on 1st February 2018
which has put forward some changes in indirect taxation regime. Also, in recent days, several
modifications have been made under GST after recommendations of 25th GST council
meeting.
The changes recommended by GST council have been notified by the Ministry of Finance
vide issue of Notification No. 3/2018-Central Tax dated 23rd January 2018 with regards to
procedural modifications. Such changes have been made by way of amendments or additions
to CGST Rules, 2017. Further, the suggested revision of rates has been notified vide
Notification No. 1/2018-Central Tax (Rate) to 9/2018- Central Tax (Rate) dated 25th January
2018.
(i) Services provided or agreed to be provided by the Naval Group Insurance Fund by way
of life insurance to personnel of Coast Guard, under Group Insurance Schemes of Central
Government, are proposed to be exempted from service tax for the period commencing from
10th September 2004 and ending with 30th June 2017 both days inclusive).
Refund of any service tax paid can be claimed after filing of refund application within a period
of 6 months from the date on which Finance Bill, 2018 receives assent of the President.
(ii) Services provided or agreed to be provided by the Goods and Services Tax Network to
Central Government or State Government or Union Territory administration are proposed to
be exempted form service tax for period commencing from 28th March 2013 and ending on
30th June 2017 (both days inclusive).
Refund of any service tax paid can be claimed after filing of refund application within a period
of 6 months from the date on which Finance Bill, 2018 receives assent of the President.
(iii) Consideration paid to the Government in the form of Government’s share of profit
petroleum in respect of services provided or agreed to be provided by Government by way of
grant of license or lease to explore or mine petroleum crude or natural gas or both, is
proposed to be exempted form service tax for period commencing from 1st April 2016 and
ending with 30th June 2017 (both days inclusive).
Refund of any service tax paid can be claimed after filing of refund application within a period
of 6 months from the date on which Finance Bill, 2018 receives assent of the President.
Exemption has been proposed of integrated tax leviable under section 3(7) of Customs Tariff
Act, 1975 on aircrafts, aircraft engines and other aircraft parts imported under cross-border
lease during the period from 1st July 2017 to 7th July 2017 subject to payment of IGST
leviable under section 5(1) of IGST Act, 2017 on the said supply. Through this proposal the
exemption is being given retrospective effect as Notification No. 50/2017- Customs, amended
by Notification No. 65/2017- Customs had already provided such exemption w.e.f. 8th July
2017.
Refund of any integrated tax which has been paid can be claimed after filing of refund
application within a period of 6 months from the date on which Finance Bill, 2018 receives
assent of the President.
In CGST Act, 2017 under section 2(16), for the words Central Board of Excise and Customs,
the words Central Board of Indirect Taxes and Customs has been proposed to be substituted.
A. Change in rates/exemption
(i) GST rates of several services have been reduced vide Notification No. 1/2018- Central
Tax (Rate). The list of services whose rates have been revised are provided below
S. Description of service Old rates New rates
No.
1. Construction Service –
i. EWS houses, constructed under 18% 12%
Affordable Housing in partnership
by state or UT or local authority or
urban development authority,
ii. Houses constructed or acquired
under credit linked subsidy
scheme for EWS/ Lower Income
Group/ Middle Income Group-1/
Middle Income Group-2,
under Housing for All (Urban) Mission/
Pradhan Mantri Awas Yojana (Urban).
a building owned by an entity
registered under section 12AA of the Income
Tax Act, 1961, which is used for carrying out
the activities of providing,
centralised cooking or distribution, for mid-
day mealsunder the mid-day meal scheme
sponsored by the Central Government, State
Government, Union territory or local
authorities;
ii. monorail and metro; 18% 12%
ii. low-cost houses up to a carpet area of
60 square metres per house in an
affordable housing project which
has been given infrastructure status
vide notification of Government of
India vide F. No. 13/6/2009-INF,
dated the 30th March,2017;
(iii) Composite supply of works contract 18% 12%
by a sub-contractor to the main
contractor providing works contract service
to Central Government, State Government,
Union territory, a local authority, a
Governmental Authority or a Government
Entity, which attract GST of 12%;
(iv) Composite supply of works contract 18% 5%
by a sub-contractor to the main
contractor providing works contract service
to Central Government, State Government,
Union territory, a local authority, a
Governmental Authority or a Government
Entity, which attract GST of 5%;
(v) Services by way of house-keeping, 18% 5% without
such as plumbing, carpentering, etc. ITC
supplied through e-commerce operatorand
supplier is not liable for registration
2. Transportation of petroleum crude, petrol, 18% 5% without
high speed diesel or aviation turbine fuel ITC
through pipeline
3. Leasing/ Rental services of Time charter for 18% 5% without
transport of goods ITC of goods
(other than
on ships,
vessels
including
bulk carriers
and tankers)
4. Real Estate Services –
Not Nil
Services of lease of land by central specifically
government, state government, UT or mentioned
local authority to government authority/
entity;
Supply of land or undivided share of land
by way of lease or sub-lease where such
supply is part of composite supply of
construction of flats etc.
5. Tour Operator Services 5% without 5% without
ITC ITC (except
ITC of input
service in
same line of
business)
6. Fumigation of agricultural produce in a Not Nil
warehouse specifically
mentioned
7. Service of exploration, mining or drilling of Not 12%
petroleum crude or natural gas or both specifically
mentioned
8. Job work –
Manufacture of leather goods or footwear 18% 5%
falling under Chapter 42 or 64 of First
Schedule of Customs Tariff Act, 1975
respectively; and
Tailoring services
9. Services of treatment of effluents by a 18% 12%
common effluent treatment plant
10. Admission to amusement parks 28% 18%
(ii) Notification No. 2/2018- Central Tax (Rate) has been issued to extend benefit of exemption
w.r.t. following services-
1. Educational Institutions –
The following services have been exempted :
(iii) In addition to the aforementioned services, several changes have been introduced in GST
rates of goods as well. Said changes have been notified vide Notification No. 5/2018-Central
Tax (Rate) to 9/2018- Central Tax (Rate) dated 25th January 2018. The revision of rate which
is most note-worthy is related to old and used vehicles which has been notified vide
Notification No. 8/2018-Central Tax (Rate). It has been provided in the said notification that
the value on which tax is to be charged shall be the margin of supplier on supply of such
goods. The new rates have been provided below-
Vide Notification No. 3/2018- Central Tax (Rate) services by Central Government, State
Government, UT or local authority by way of renting of immovable property to a registered
person has been brought into the ambit of Reverse Charge. Therefore, w.e.f. 25th January
2018, a registered person shall be liable to pay GST on such service.
Vide Notification No. 4/2018-Central Tax (Rate) the specific case of Transfer of
Development Rights (TDR) has been handled. It is specified that in case of supply of services
by transferor of development rights who received consideration in form of construction service
of complex etc. and the developer who supplies construction service against consideration in
form of TDR, the liability to pay GST shall arise for both parties at the time when the said
developer transfers possession or the right in the constructed complex, building or civil
structure, to the person supplying development rights.
D. Procedural modifications :
The following procedural amendments have been notified vide Notification No. 3/2018-
Central Tax, dated 23rd January 2018-